Steem Sinks
I am thinking of sinks for Steem and two come to mind.
Burn to Promote.
Burn to promote is the future of advertising.
Instead of buying votes, which leads to downvotes and is very complicated for new users, people can instead simply buy Steem and burn it for extra visibility on their content by pressing "promote". A way to easily promote posts has been proven to be desired as we have seen Steemians decline payout and buy votes for the post they want to get more attention on.
Example:
^ This user spent $90 to get this post to the top of trending, that isn't chump change.
Burn to promote creates demand for Steem and the burn creates a natural sink. As we get more users, the cost & demand of visibility within the platform will increase, and watch that circulating supply of Steem decrease and watch the price trend upwards!
For instance, on 3speak we are going to have ad slots where you can burn steem or SPK to pop your ad there. On 3speak we are also going to allow creators to use burn to promote on their tokenized Steem communities.
So if someone with a million users ports their community over, users can purchase the creators token, burn it, and get onto trending/ad space on said community. 3speak will buidl the tools for creators to leverage to maximize their profits on their individual attention economies.
I really believe tokenizing attention in a way people need to burn Steem to get extra visibility is such a great way to add utility leading to bullish buy pressure for Steem.
Whoever wants to make a PR for Steemit to have burn to promote (like @steempeak has), I will fund the work required.
Next Sink:
5% burn fee for Instant Powerdown.
While having inflation coming in, charging people to cash out early can offset a lot of the PoB Steem faucet we have. I also believe this will directly result in more liquidity and a higher market cap overall.
Investors with large capital will rarely "YOLO" into an investment (locking up Steem for 13 weeks with no way out = YOLO.) Since Steem has an actual use case, a lot of the stake is locked up and being used, either to power projects or for social influence, voting for witnesses, ETC. This creates very thin sell liquidity which leads to large buy orders never being filled.
Example: If I wanted to buy 10 million USD worth of Steem right now, I couldn't, it would take weeks/months of me setting buy orders and leaving my money on an exchanges for long periods. Large whales will say no thank you to that.
Sell liquidity is just as important as buy liquidity if we want a highly liquid token, so having a way to powerdown instantly, attaching a fee that is burned for the privilege will be a very good thing for Steem, IMO.
@Marki99 added a good point:
One truth about trading and investing: most people sell the bottom, most people buy the top.
This has to be true, cause otherwise there would be no pumps or crashes. When people buy at the top, it’s FOMO. When people sell the bottom, they are simply scared. At both times they act irrationally.
When steem pumps, it is possible to buy the top.
When steem dumps, it is impossible to sell the bottom, cause of the fucing powerdown period. We DON’T allow investors to be irrational.*
And if someone doesn’t sell the bottom, he starts a powerdown and continues selling at higher prices over weeks. We give sellers a better price. We don’t let them act irrationally.
We allow them to dollar cost average (selling not buying) and get better average prices over a longer period.
What this points to is the fact the price of Steem is artificially capped (either to the downside or upside.) While certainly, this is a two-sided blade, the most liquidity comes during tops & bottoms, so Steem misses out on a lot of natural high liquidity spots.
For security, we can have whitelisted withdrawal addresses, when changed, the funds are locked for a certain period. We can also find ways to add 2fa as EOSIO did here: http://bit.ly/38hdA9R
We can give users the option to remove the instant withdrawal feature if they don't want to use it. If they decide to add the instant withdrawal feature back, funds are locked for a period.
So burn to promote & a burn to instant powerdown are my ideas of ways to create bullish sinks for Steem.
Any suggestions? Comment below if you have any ideas for Steem sinks.
It would be good if the 'burn to promote' strategy finally gained traction and it was recognized by all the front ends.
I've been against instant power downs across the board, fee or not, but if it's opt-in people can choose to do so at their own risk. My main concern would be if 5% would be enough to discourage manipulation of stake-based voting.
Great observation. I didn't go 1% because of the voting manipulation (what we see on EOS by exchanges using users funds to vote themselves in) - 5%, IMO, would be more than enough to curb voter manipulation. Really, the greatest place we see this is by exchanges voting with users funds, it would be illegal for them to burn 5% of their user's funds to vote.
And on the other side, just rogue whales trying to game the system, 5% of anything big enough to sway votes because very expensive IMO.
Instant powerdowns would create a lot of risk. This would need more research although i find the idea very interesting.
5% though really isnt much. As we saw yesterday the market can move 50% in a day. If this creates so much risk then the payoff for the others Steem holders should be a bigger then 5% burn.
@joshman In order to prevent whales manipulating votes, the best way would be to create a powerup period instead of powerdown. It would go that way: once you decide to stake, only some percentage(let's say 10%) of your steem becomes Steem Power every week.
Why this is better: It forces new comers to use the platform for a few weeks before being fully powered up. They can't have all the influence they want in one click. It also prevents the manipulation you were talking about, as they won't be able to constantly power up and down.
And finally, if witness voting is being manipulated before a hardfork, a whale would need to power up weeks in advance in order to get maximum influence, this would incentivize long term hodling for influence.
I still like the 5% burn purely as a sink though. Maybe 5% would be too much and no one would use it so it could be tweaked later.
Burn to promote already up and running on @steempeak. Steemit is the sluggish one on implementing it like Steempeak do (Steemit has the burn promote tab that no one reads now). Maybe @quochuy can help to upgrade the condenser for it?
There is another STEEM sink already planned on SMT whitepaper, it's called the automated market maker (permanent reserve). Too bad it doesn't make it to SMT v1.
For instant power down with fee I just want it to be optional because I sure as hell want to opt out from it (or not opt in depending on the default)
And steempeak is more than happy to work together with steemit and others to make that burn to promote in a way sync up or be sort of decentralized info.
And yes if @quochuy is interested they have said they may consider a really well done Pull request.
This is great news, thanks Jarvie!
I feel like our burn system that gives the interface the option to have their own ui placement system and fee is the best decentralized option. We would be happy to add other interfaces to the action and send the fee along for placements on their system. Wallet transactions seem to work fine
We would love to have 3Speak be apart of this. If @quochuy wanted to create the Pull request for Steemit I would be happy to fund the cost.
Our burn promote page presently looks like this... I think we're more than happy to add 2 more entries for people to add promotion for 3Speak and Steemit.
You'd get a wallet payment that is proportional to how much they burned and will know how much they burned.
Then it's up to 3Speak and Steemit to determine how those are placed in feeds.
For example SteemPeak.com places them only inside of TOPIC based feeds. Not your follow feed or blog feeds or anything like that just topics and "all topics feed" (which some call trending)
Then we make a decision of how often they're placed.
And we let them choose the topic feeds they go into or if they want a general promotion which means it goes to all topic feeds but is more expensive.
It's a pretty flexible system. We'd love company on this endeavor. We've already had hundreds of promoted posts.
Happy to start a group conversation with you and @quochuy... even if you guys just want to do the Pull Request for the presentation of the promoted posts and just piggy back off our interface for making the burns/payments for now that would help save a lot of time and test it out.
Then maybe @aggroed and his team will also join in for nitrous interfaces.
Front-end implementation is the way to go; unfortunately, there is no consensus when it comes to the front end. It is very much the Wild West.
I appreciate the idea and, if popular front ends choose to run with it, it could be great but there is always be the prospect of that rogue developer that concerns themself more with personal profit than the gain of the platform.
Another thing, if we relent against the bid bots, it is only a matter of time before they slither their way back into use. The big difference is their affect towards the inflation and distribution.
Some of them I'm sure are reasonable folk and will agree with you but there's always that one. (We called them Blue Falcon's in the Marines aka Buddy F*ckers) that is unwilling to forego their personal profit so that all our tokens would appreciate in value.
People being people...
But, HELL, if anybody can pull the burn to promote thing off, I would say it's you. Let me know if there is anything I can do to help.
On @steempeak it has already been implemented.
I've been told if someone puts a PR for a burn to promote for steemit.com - there is a very high possibility they implement it and make it the standard (for steemit.com). I did not get a confirmation, but I believe getting a PR put out there would get the ball rolling.
I'm with you. Looking at the Condenser GitHub. Looks like this would be submitted as an Issue for Enhancement Suggestion.
I could draft something up based on your post if you would like. Let me know but, in any case, here is the link to the repo contribution guide.
https://github.com/steemit/condenser/blob/master/CONTRIBUTING.md
Sure, whatever you can do to help would be greatly appreciated.
Alright, brother. It's out there. Sorry for the shameless plug in the end. I couldn't resist.
https://github.com/steemit/condenser/issues/3679
Oops forgot to link your post for more detail.
Unf*cking nowDone!
Thank you!
Great post, thanks for the mention!
Another sink I thought of but don't love is to burn a percentage(let's say 2%) of the steem raised through ICO for an SMT. If there are huge ICOs like in 2017 this could be significant.
But it would also discourage people from doing ICOs using SMTs, which is why I don't like it.
Maybe we can make it optional, and some companies will use it as a marketing tool: if they burn steem, then the steem community will see them as a commited network participant, and may be more likely to invest in the ICO.
In earnest burning for power down will make it rational to power up since it'll be possible to take it for just a little fee anytime basically. I'm not really technical, but this Seems reasonable even to the ordinary business minded person
Not really, if price increase way above 5% from the initial investment.
Also, the blockchain still pay for locked up steem, so, over time, this cost is reduced.
Great call with the instant powerdown option. No serious investor is going to invest in steem with a 13 week lockup. This is actually insane.
I understand that a certain point this was for security reasons, but we are way way past that. This is an antiquated feature (at least in crypto time) and getting rid of the lockup in the way you suggest is an excellent idea.
Completely disagree. We haven't moved past it. The scammers have gone to greener pastures. This would ring the dinner bell really loud.
Should've done this ages ago so at least STEEM can stay at least above $1. Just my 20 cents.
::cough cough: err... you mean 0.20 SBD. (Oh sorry the pegs broken so maybe not?)
Burn to instant powerdown is a great idea and I'm sure between tokens and SM cards many users would've done this to buy cards, packs, tokens etc....
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I know that this year will be very good for Steemit and the price of Steem, I feel that way and I have my hopes with all these new changes.
Burn to promote is good
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